Episode 45: Ask Me Anything

I had not done an Ask Me Anything (AMA) session in over a year which led to many questions on a wide variety of topics: AI, augmented reality, crypto, macro and much more.

If you prefer, you can listen to the episode in the embedded podcast player.

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Here are the key questions we covered:

  • 00:01:44 Artificial Intelligence: Where are we now? Where are we heading? What is the timeline? Why is FJ Labs a way contrarian on the AI trend?
  • 00:09:42 What’s your perspective on augmented reality? Is the Apple Vision Pro a revolution? And what is the timing for that to filter into our day-to-day life?
  • 00:15:28 What was the fundamental inspiration for me to start OLX?
  • 00:20:45 Can you give us some context or details on Midas?
  • 00:23:15 Is there any way for a small retail investor to invest in early financing rounds for startups? If yes, how?
  • 00:24:44 At for pre-seed rounds, what should be the GMV to get your attention? Let’s say a new marketplace. What GMV would be impressive in the first month, six months, and one year?
  • 00:25:39 What do I expect to see at the seed round?
  • 00:26:41 What’s the correct take rate?
  • 00:27:56 What are my current perspectives on the crypto market?
  • 00:34:43 Does FJ Labs have an activist approach when investing in startups? How are you supporting the founders?
  • 00:38:03 Is there going to be a fiat currency crisis where the dollar will be replaced? Will something like BTC become the reserve currency?
  • 00:41:18 Have you decided on your next adventure for outdoor travel that you’d like to tackle?
  • 00:43:11 I’ve heard that a startup should recoup their fully loaded Customer Acquisition Cost (CAC) within 6 months based on the contribution margin and then triple that amount within 18 months. Could you confirm if these numbers are accurate?
  • 00:44:30 What should the first 3-6 months of a new startup look like? Talk to potential customers? Generate demand? Build a prototype? Validate hypotheses? Etc.
  • 00:46:33 Does FJ Labs have an anti-portfolio?
  • 00:50:28 Do you have any thoughts on the longevity industry? Do you think platforms like Hims or Ro will evolve in that direction, or will there be a new player?
  • 00:53:33 I’ve listed things that I heard you consider when rating a startup. (1.) Team (2.) Unit Economics, significant TAM (3.) Fair deal terms, reasonable valuation, (4.) is it beneficial to the world, aligning the general direction of global trends, offering new opportunities to those with fewer opportunities. Is there anything else?
  • 00:55:02 What build did I play at Elden Ring?
  • 00:56:00 Did you have any mentor in your angel investor career? If yes, who is it? And how does the person help you?
  • 00:58:49 Are you tempted to invest in AI?
  • 01:00:08 What’s the most overused buzzword that you can’t stand?
  • 01:00:37 What valuation of a company is risky, yet a bit safe and worth the squeeze?
  • 01:01:27 Any particular places or people you prefer to keep up with your bio health updates?
  • 01:02:38 What is a surprisingly cheap and effective marketing channels?
  • 01:03:50 As an investor, doesn’t make sense to look for opportunities other than AI even though AI is “hot” now?
  • 01:05:53 What are the most incredible business opportunities you have seen in preventative health lately?
  • 01:07:04 Can you name successful blockchain based marketplaces that work with goods other than NFTs?
  • 01:11:39 Regarding Firgure.ai, when, in your opinion will we see humanoid robots in our daily lives? 3 years? 5 years? 20 years?
  • 01:14:15 Do you think asteroid mining is an industry that will become feasible or profitable within our lifetime?
  • 01:16:08 We continue to see economic sentiment down, given the cost of money felt by consumers. Curious, given how you feel, especially the dire US consumers in Macroeconomic update where you see bright falls, bright spots in the landscape?
  • 01:19:35 Whom do you think had the most impact on your investing thesis?
  • 01:21:16 Is there something you’ve seen in recent startup pitches that you think the general public should know?
  • 01:23:00 When it comes to crypto, how game changing do you consider the ETFs to be going forward?
  • 01:24:22 What is the ideal number of founders per startup? Two, with one being technically oriented the other more focused on people and sales?
  • 01:25:43 What are the most important skills that students should develop in order to work as an analyst in a VC fund? What are the qualities you’re looking for when recruiting graduates?
  • 01:27:34 If you live in a different time past or present, what do you think you would do professionally or future?
  • 01:32:08 My main competitor received ~$200 million in recent debt round in 2021, and $490 million in 2019 led by SoftBank. I think that’s a good sign for me because they started 2007.
  • So now they’re too big and too slow. My startup is like a small pirate ship that can easily change direction, add new features, et cetera. Am I wrong?
  • 01:36:54 Investing in France: What do you think of the system?
  • 01:37:48 What do you think of digital biology?
  • 01:38:41 With your milestone birthday coming up, I can’t wait. What adventurous ambitions are you most looking forward to in the next half century?
  • 01:40:14 What is the dream guest you would like to have on the Playing with Unicorn podcast and why?
  • 01:44:58 Can you share the acceptance percentage of FJ Labs for the pre-seed and seed rounds? What are the chances that you will be invited to poll with your team?
  • 01:47:53 What is the last job to be replaced by AI robots?

If you prefer to read the content, here is a transcript of the episode. Note that the translation is automated and not 100% accurate so caveat emptor.

Hi, everyone. I hope you’re having a wonderful week. It’s been over a year since we’ve done a Ask Me Anything session, and that one year, very much has happened. I mean, on the personal side, I had a daughter. I now have a dog. and on the professional side, we’ve seen a pretty profound transformation of the world.

We’ve seen a revolution in the artificial intelligence space. We’ve seen the release of the Apple Vision Pro. And we’ve seen a massive improvement in robotics, continued improvements in solar and battery and general electrification. And the economy, which people were expecting to go in recession in either 22 or 23, actually didn’t do so. And we may be heading for a soft funding. So. I’ve been collecting my thoughts on all the trends. I’ve been collecting your questions for the last week or so to discuss all the things that have happened and changed and should be considered as we think through where we stand and where we’re going in this coming year.

So, without any further ado, let’s get going. Welcome to Episode 45, I’ve played with unicorns, ask me anything.

So, feel free to type your questions in the chat. I will try to address them in real time as they come along, but I’ll start in the meantime with questions that were posed via email or on social media ahead of the show. First big set of questions concerns artificial intelligence.

[00:01:44] And general questions seem to be, you know, where are we, where are we heading? What are the timelines and why has FJ labs, in a way, been contrarian, right?

Like, it feels like everyone else has gone all in investing in artificial intelligence. And we’ve been doing much more quote unquote boring things, like, B2B marketplaces, digitizing B2B supply chains, SMB, enablement, et cetera.

And, before I get through that, specifically for artificial intelligence, let me take a little setback in the history of technology. Humans have typically overestimated how quickly something is going to happen and underestimated its long-term fundamental impact. And that’s because as founders and entrepreneurs, we have a tendency to live in the future.

I wrote a blog post, a few months ago called “The Timing is Everything”. And the thing is, because as founders and entrepreneur, we’re meeting where the cutting edge of technology, we think these things we live and imagine will happen sooner than they typically do. I mean, we have a tendency to be rather optimistic, which obviously defines us.

We wouldn’t be founders if we weren’t that optimistic. And as a result, we think things will happen immediately. But if I go back to the first tech bubble in the late 90s. All of the ideas that were created then, Pet.com, the Webvan, eToys, etc. actually were ideas that made sense.

It’s just the infrastructure and the penetration of the internet was not high enough for it to work. And so, all these companies did fail and go under in 2000, 2001, but actually came back in a new form much later. Of course, Instacart would be the equivalent of Webvan, or Chewy would be the equivalent of Pets.com. Amazon writ large now sells everything, including toys. And so, these ideas may make sense once you have enough penetration, the right cost structure, etc. And so, as I think through AI, I think something similar is happening. What people call these hype cycles, and right now, I suspect we’re either past the top of the hype cycle or at the very near the top of the hype cycle when it comes to AI, where everyone’s thinking it is going to transform society as we know it. Basically, sooner rather than later. And of course, the user experience when you play with mid journey, or DALI or frankly, GPT itself in terms of, tax Q and A is extraordinary. but you need to think through how long it’s going to take for actually that to translate in terms of being used by the largest components of GDP, which are like governments and large enterprise.

I suspect that that’s where there’s possibly a disconnect where it will take longer than people suspect, right? Do I think the very long run, you’re going to be able to use AI to have like the most efficient medical claims processing? Absolutely.

Do I think Anytime soon, someone’s going to do that with the hallucination problems and the potential liability problems if you’re doing it incorrectly, probably not, right?

And so, while I suspect that the AI revolution, we’re currently overestimating how quickly it will impact the world. We’re massively underestimating the impact it will have. And right now, we’re seeing these massive investments going in at very high valuations in what I would consider to be mostly non differentiated models.

Everyone’s using the same data, the same types of LLM. And no business model. Now there’s a few exceptions to that rule, right? There are some categories where there’s willingness to pay, for instance. So, if you’re a mid-journey, it makes sense. Mid-journey in a way is replacing stock photography. There’s clear willingness to pay for stock photography. So, there’s no reason there wouldn’t be a willingness to pay, for mid journey to replace it.

Let me actually take a pause. I’m seeing no comments, which is suggesting the comments are not working for some reason. One second.

Anyway, hopefully we can fix that while the stream is going. So, what we’ve been doing, by the way, is in a way every company we’re investing in is an AI company. Every startup I know is using AI in one of two ways. One is to improve its productivity, so everyone’s replacing their customer service agents with AI, and developers who are using them become more productive.

And frankly, an average developer could become a good developer and improve its productivity dramatically. On the second slide, we have how do you change user interfaces, with AI? And there are two or a few different types of approaches. when you think of discovery, let’s say you’re a consumer and you’re browsing. Today you have three paths for buying something. If you know what you’re looking for, you go in the search engine, you go to Amazon, you type it, you get it. Maybe you can improve search results a little bit, but it’s not going to be fundamentally changed. If you go to something like Vinted, you just like to browse through listings.

Again, the browsing is part of the experience. We’re not trying to make it more efficient. As a result, AI doesn’t play a role. But things that are, like, considered purchases, so where you need to actually think through it, think of company like curated for high end sports equipment. You know, like, skiing equipment, or for travel. Or even buying a car, there I can see, finally changing the game.

We’re seeing the implication or implementation behind existing startups because they already have the data.

For instance, we have a startup called Rebag. And Rebag is a handbag marketplace, and they happen to be the Kelly Blue Book for handbags because they have all the pricing history, et cetera. And the user experience for selling there is mind boggling. They have an AI called Claire and you can go and take a photo or a few photos of your handbag, it’ll figure out the title, to the exact model it is, the description, the state it’s in.

And give you and figure out the correct price and your handbag will be sold in minutes. Compare that to the traditional experience on, let’s say, an eBay, where you need to write your title, your description, pick the category, select a price, and then wait a week or two for it to sell.

It’s a ginormous user improvement. So, as I think through this, you know, when we think of what we want to be investing in AI, we want to be investing in vertical applications and categories where there’s a business model, in differentiated data sets. And for the most part, right now, we’re not seeing that which is why we’ve been focusing on, I guess, what I would call it, the digitization of B2B supply chains, because there we’re talking about trillions of dollars where nothing has come online.

And if imagine you want to buy petrochemicals. There’s currently no way to do so. There’s no catalog where you have the availability. There’s no online pricing. There’s no connectivity to the factory to understand a combination of availability and manufacturing capacity. There’s no online ordering, there’s no online payment, there’s no tracking, and there’s no financing.

And all of these can be different companies. So, pause here on the AI thing, and I’ll go to the second main set of questions on, AR augmented reality and the vision pro.

So again, let me just still check on the comments. I see they’re coming in from Facebook. Let me try it.

[00:09:42] So, the next big question I had is like what’s my perspective on augmented reality? Is the Apple Vision Pro a revolution? And what is the timing for that to filter into our day-to-day life?

And it’s interesting because I’m not actually sure what consensus is in, in this category. There was clearly consensus like a decade ago that virtual reality was going to be the new new thing.

And we were, at FJ Labs, contrarian on that. We decided that or not decided. We analyzed it and we realized, okay, if you take a step back and before we talk about augmented reality, we looked at the iPhone as a platform, right? So, when this came out, this came in, this came out in 2007. So, when it came out, when was the right time to be building iOS applications, if you wanted to be the most successful iOS developer?

And if you built applications, mostly games that were the ones with the best business model, in the early days, you did okay, but you didn’t actually win the category. Okay. The winners from the category, a company called Supercell, which ultimately sold for 10 billion, was created in 2012.

They’re the maker of Clash of Clans. The reason 2012 was the right time period is in the five years since the launch of the iPhone, you had enough penetration. Meaning you had already over 100 million users on the platform. One platform with 100 million users. The best practices in monetization, customer acquisition, retention had already been established.

And as a result, it was a just a question of applying the best practices into building the best new game, which was Clash of Clans. And that at the runway success. We know in the ultimate exit; I think to 10 cents for 10 billion or so. And so, when it came to virtual reality back in the day, I realized there’s all these different platforms, from Oculus to PlayStation VR or whatever.

None of them had that many sales. Retention looked very low, and the cost was reasonably high, and the quality was also reasonably low. When you compare the graphics on your PS5 to the graphics in VR, it felt. So now let’s go to today, augmented reality. Now, if I think through the long-term vision, do I think augmented reality is going to be a platform shift away from this? Absolutely. Spending all your time in this makes no sense, right? Like, this is a limited form factor. You’re hunched over. The input output speed is rather limited. And so, we, what you want to be doing instead, is overlying it with your field of vision and probably controlling it with your thoughts. Right?

So, we’re investors in a, mind reading company or a company called Paradromics which is neural brain interfaces, kind of like Neuralink, if you want. And obviously, right now we’re mostly giving this brain surgery targeted, like medical applications for people that have either locked in syndrome or tetraplegics.

And likewise, you want probably glasses that have lasers that right in your retina or maybe intelligent contact lenses. And so, when you see someone they’ll tell you who they are, the last time you talked to them, what you talked about, who the parent, their kids are, et cetera. And that would be absolutely fantastic.

But we were far from that, right? Apple Vision Pro is very heavy. It costs like 4,000. It’s pretty crazy from a pricing perspective. And this is not a mass market product. The history of mass market consumer electronic devices is you need to be at a 300, 400 price point. you can’t beat a 4,000-price point.

So, of course, is it an early adopter product? Yes. But right now, when I look, people they have it a month in, two month in. They we’re not using it on a daily basis. They haven’t found that killer app or application. I think it’s because it’s too bulky. You know, you look like an asshole doing it, right?

The glassholes, if you want. And so I suspect that we’re far, far away from that AR revolution. So, there will be a platform shift away from cell phones and to augmented reality. But given that you want light glasses and light contact lenses and maybe probably mind reading. I mean, I could see perhaps eye tracking, perhaps voice, but like again, speaking to yourself out loud in a public setting is very, very weird.

So, I suspect that we are a decade away from that platform shift. Maybe more, maybe 20 years away. So sadly, in a way, well, I think it will happen. This is a 10, 15, 20 years in the future and many, many other things will happen before that. So, Apple Vision Pro. I suspect will be deemed a failure in the next few years.

In fact, internally at FJ Labs, we have a bet on how many units will be sold in the next five years. I don’t remember exactly what the parameters of it are, but some people were like in the tens of millions, and I’m on the lower end. I’m below whatever threshold some of the other members are.

Let’s see. We had a few questions come in. I’ll pause on the pre-sent questions for a second.

[00:15:17] So, Hamad, sorry if I’m butchering your name. [00:15:28] You share insights on the key strategies and lessons learned that have contributed most to OLX’s success and growth in the online classifieds market. What was the fundamental inspiration for me to start OLX?

So, taking a step back, so I actually bought the domain name OLX back in 98. my, the first company I built was an eBay for Europe, and I also helped build an eBay for Latin America. I wanted to call it Alibaba, and I actually reached out to this guy in China called Jack Ma to try to buy his domain, and he wisely declined.

I didn’t realize what he was building, at the time. And I was going to call the company OLX, and the reason I did not call the company OLX is because I had a competitor called QXL, and they looked too similar, so my first company was called Aucland, and the Latin American one was called Deremate, which became Mercadolibre later.

So, that journey came to an end, and in a way, it’s not a regret, but it would have been better to build The Classified site OLX back in 98. It’s way easier to build a Classified site than building a transactional site where you need payments and credit cards and auctions and an engine, but I’m not sure I could have raised VC money without having the business model that was embedded and made sense in the eBay experience. If you want to say, hey, I’m doing eBay for other geographies and that kind of was accepted or acceptable.

Now, after my first company, I didn’t succeed, the way I would have expected to. I built another company in the mobile content space where I did very well. When I sold that in 04, saved for 18 months and in late 05, sort of thinking, okay, let’s go back to my true love of marketplaces.

I like creating or building liquidity and transparency in markets that are otherwise opaque and helping users, writ large by bringing things they need in their lives and making deflationary and providing these beautiful user experience and Craigslist at a ready come of age. So, Craigslist is becoming a force to be reckoned with.

They’re part of the fabric of society in the U.S. And clearly, even back in 2005, I mean, even today, the user interface sucked, right? It was a user interface that I felt, was, was already a decade too old in 2005. So, I went to Craig and Jim, the CEO and founder, respectively, or the founder and CEO respectively of Craigslist, and I said, hey, can I help you guys?

You guys are doing great public service to humanity. By not moderating the content, you have all the spam, the scams, the phishing, the prostitution, the crime. That’s not appropriate. Let me fix that. I’ll do it for free. Please let me do it for free. Don’t pay me anything. I mean, we’re free for a year.

If you’re not happy with my job, you can fire me. It doesn’t cost you anything. And if you’re happy, we can discuss after a year whether or not there’s a way for me to single. But they did not give me the time of day, and so I’m like, okay, I can do better. And what’s best than to compete with someone who doesn’t care about competing, doesn’t care about winning?

And so, I decided I wanted to build a better version of Craigslist that was female friendly, you need to remember that women are the primary decision makers in all household purchases. And yet, Craigslist was the least female-friendly site out there. And, as I said, women are the ones who decide which couch you buy, which little house you live in, which car you’re driving, which babysitter you’re hiring, and so you need to create a very safe environment.

I wanted to start getting ready for the mobile revolution, so I wanted a mobile-compatible or enabled, female-friendly, super safe, global moderated classified site. Now, I would have liked it to work in the U. S. and the West, so we launched in a hundred countries. And because they’re already incumbents, like Craigslist said, liquidity didn’t take off there and it ended up taking off in Brazil, India, Pakistan and Portugal.

We went from 100 countries to 4, won there and then grew and then from there used the profits, especially in Brazil, to then grow to the rest of the world. And that’s where we ended up with leaders in 30 countries with about 350 million units a month and 10,000 plus employees.

[00:19:42] What are the key strategies and lessons to me most?

I think being very thoughtful, so moderating all the content. Nothing goes live unless it’s moderated. It was definitely a key lesson.

Let’s change a little bit the angle here. Making sure that we matched supply and demand very effectively. So, we were very good at doing long tail SCM. The people like eBay, they were buying used car, we would buy like used BMW, 325xi, x1000 miles, what color, and we would pay like a penny a click when everyone else was paying a lot more.

So, we would get a long tour, long tail, SCM strategy because of all content. We have so much SEO. We had a very effective SEO strategy and we just made sure that the quality of listings was high. And then we always match supply and demand such that 20 percent of the items listed would sell, which is when you have liquidity and just scale up in parallel.

[00:20:45] Can you give us some context or details on Midas?

So, Midas is a new company that I recently built. It’s a yield bearing stable coin. So, I’ve been in crypto since the beginning. I was mining, BDC in the early 2010s. I’ve brought FJ Labs to crypto. We invested in like a hundred, crypto startups.

We were like seed or pre seed in Animoca and in Figment. We have a liquid crypto strategy where we have like 30 liquid crypto tokens on a long only strategy. And I’ve been thinking through. What are the companies that we should be building in the crypto space? I thought I was just out of ideas.

I wanted to build, a one click consumer-facing saving product, I wanted to build a neobank built on crypto rails. But my friend, Gary Gensler disapproved all my ideas. So, I didn’t launch any, even though I actually fully coded a few. But once rates are going up and it was obvious there was gonna be a crypto winter, I’m like, okay, what is the one-use case of crypto?

And the clear use case of crypto is stable coins. Stable coins or a store of value and means of payment. And even at the bottom of the bear, people are using them, especially outside of the US, in a very effective manner, right? Like the, if you’re in a high inflation country, it’s an amazing way to save. If you’re in places where there’s limited payments for businesses, an amazing way to like to transact with people.

So, they have a clear use case and I’m like, in a non-zero interest rate world, stablecoin should be yield bearing. Now, the question was. Is there a legal way to do that, given that you’re issuing a security token, which is very fundamentally different from what the way Tether and Circle, or USDC and USDT, are legally structured?

And it turns out the answer is yes; we found a way to be MIFID and MECAT compliant. It’s a European regulated company that is basically a stable coin that is yield bearing. We buy T bills, and we give you the yield. Right now, it’s 5.23%. We’ll vary with what the rates are. And if you have stable coins for any reason, you know, you’re waiting for the market to correct before you buy, you’re saving in it, etc.

There’s no reason not to be in a 100 percent safe in the sense that it’s backed by the U. S. government. T bill that is yield bearing and making 5.23% versus 0 percent if you’re just holding it. USDC and USDT.

[00:23:15] Gipson: How are you doing well. My question is the following: Is there any way for a small retail investor to invest in early financing rounds for startups? If yes, how?

There are a few ways to get involved. I think there are a bunch, AngelList, I guess, is probably the main way. And I think on AngelList, as long as you’re an accredited investor, there’s a whole bunch of options there. Now, I don’t think most people should be investing in individual startups because the five-year survival rate of a startup is 5%.

So, there’s a 95% failure rate. I would invest in; you have two options. Either you invest in a fund, differentiated or has enough diversification and, or you invest yourself in 50 companies or more. You only do well in this space if you have at least a 100 because then the winners and because.

Venture follows a power law where a few companies return all the returns and you want to be in them. And so, you want a very diversified portfolio to guarantee that you have good returns. So probably on AngelList you can find some funds. We at FJ Labs have a friends and family entrepreneurs fund that PA that we do annually, that people can commit to. Again, you need to be an accredited investor.

So that’s probably the way to get involved. I would avoid most of the crowdfunding sites, projects that are not really serious.

[00:24:44] At for pre-seed rounds, what should be the GMV to get your attention? Let’s say a new marketplace. What GMV would be impressive in the first month, six months, and one year?

Taking a step back, a pre seed round is typically pre-launch. And so there’s usually zero GMV. what you need to do, though, is have the credibility, to raise that pre seed round. Now, pre seed, there’s very few VCs that do pre seed. It’s more the, it’s more friends and family. So, it’s like full friends and family, and you’re raising like, I don’t know, 1 million at 3 to 4 pre or 5 pre.

The thing is you don’t actually need that much capital these days. These days, it’s so cheap to build kind of anything from a tech perspective that even with like 50k, you should be able to get off the ground, etc.

Let me answer the question more at the seed round.

[00:25:39] What do I expect to see the seed round?

So, the seed round should be kind of 18 months after your launch. In 18 months after your launch, I’m expecting you kind of depends on your take rate, right? So, if you’re a B2C and you have a 15 percent take rate, kind of expecting 150k GMV per month, with let’s say 20% take rate to make the math easy, and that’s 30k net revenues.

And there you’re raising three at 9 to 12 pre or something like that with Good Union Economics. And Good Union Economics is one where you recoup your fully loaded CAC on a net contribution or a CM2 basis. After 6 months, and you have to re exit after 18 months. Now, you haven’t been live that long, so its projections based on early results on churn, etc.

But, it gives you a sense of that. Now, it’s not obvious, if your numbers are not there, that’s okay, as long as you can justify it. You can say, oh, you know economics are not there, but with scale, cost for delivery goes down, fulfillment costs, whatever. As long as you can rationalize it and you don’t need to restart the multiverse to align the scale.

[00:26:43] My competitor’s take rate is 20 to 30%. I thought that something more fair like 10 percent would be a good start.

What the correct take rate is actually really depends on the elasticity of supply and demand in the market and kind of what are the services and value are you providing?

Are you providing enough value to justify 10%? or are you providing enough value to justify 20 or 30%? Right. So, if you’re doing Like money back guarantee and escrow and whatever delivery, et cetera. Maybe you can just find more. So, the answer, of course, of where the correct take rate is, is it depends, you need to figure out what the elasticity of supply and demand is and understand what value you’re providing.

As long as you’re providing a lot of value to one or both sides of the marketplace, there’s usually not too much risk of disintermediation. So that’s basically, okay.

Let me pause here and what other questions have come in elsewhere? So other questions that were submitted while we wait for more questions to be coming in from the audience.

[00:27:56] What are my current perspectives on the crypto market?

So, what’s interesting is, we kind of read the crypto markets correctly because we read the macro correctly. In February 2021, I wrote this blog post entitled, Welcome to the Everything Bubble, where I said that because of overly loose fiscal and monetary policy, all asset classes were correlated one of the way up. And I meant all asset classes.

I mean, SPACs, NFTs, crypto, real estate, bonds, equities, privates, you name it. And so, I said, if it’s not anchored to the ground, sell it. And of course we ate our own dog food. We listened to our own strategy. We sold as much as we could. Of course, it’s a private market in the VC world. So, we sold lots of, we would like to maybe like a 10 percent would like to, but still a bit better than most. But the obvious conclusion was when rates go up, because crypto is actually deemed really is a risk asset, it’s the ultimate risk asset. Would fall dramatically.

And there would be a crypto winter. In fact, it’s that insight that led me to launch the Midas as an idea that we’re working with a bear market and a bull market. And so, we sold all of our liquid crypto in November 21, early 22, we did secondaries of some of our crypto companies that were private, did really well.

Now the corollary to that is in 23, we’re like, okay, there is a moment in the future where market conditions are going to change. There are fundamental use cases for a decentralized ledger and for Web3. Their interest rates are going to fall. And as even if we’re only talking about, like, the store value of a BTC, given that it might get approved at some point with a BTC ETF, there’s probably change in sentiment that’s coming. So, in 23, we actually started going long pretty aggressively.

Actually, I think we started in 22, but in 23 and senior turn. So again, you want to be canti in the market, but you want to be contrarian when everyone else is buying, you want to be selling. When everyone else is selling, you want to be buying. And so we started going long and of course have done extraordinarily well. Things have moved faster than I expected, I have to admit.

Interest rates have not started falling yet, and yet the market is doing really well. And usually in these types of markets, regardless of underlying value, there’s a buy the rumor, sell the news. And so, I’m like, oh, as the BDC ETF is approved, maybe that would have been a time to sell.

And it turns out that the ETF inflows, the capital inflows from the ETF have been so high that they buoyed the entire market. So, this market run largely has been driven by input of massive liquidity in the crypto market because of the ETF on Bitcoin.

And when you think about where we are in that cycle, we’re still at the very beginning. What’s happening is it’s completely programmatic, meaning one fund will say 1% of my assets will be BDC, and as their AUM goes up, they just buy more and more BDC. So, it’s not, they’re not even doing an analysis. What is the correct value, et cetera. It just, it’s automatically bought or sold to be a percentage of their funds.

And as more and more funds put BDC as part of their assets under management, it’ll increase the inflows. Now, a lot of that has happened. A lot of expectation of that has happened. The question is how far do we go from there? And the good news is we’re now seeing real applications as well in crypto beyond purely just speculation.

And, I’d say we’re mid innings of this run. Now, there’s likely a correction. There’s always corrections in the middle of bull runs. And so, they’re very well be a correction in April and May of this year, given how fast things have run prior to real economics, business and transactions happening.

Nonetheless, I think we’re in the middle of the run. What could lead to the next big run in the crypto market and the crypto cycle beyond sort of decreasing in US rates, is actually an ETH ETF. Now there’s been, people were optimistic that an ETH ETF would be approved in May. I think the probability of that as a low, I’d say 30% or less. And probably less than 50% or even the August approval.

But probably over 50% in 2025 at some point, maybe Q2 or Q3.

If and ideally when an ETH ETF gets approved, I think this launches a massive bull run in ETH, frankly, probably even in Solana, like the two L1s that are winning and all the applications that are on them. And so, I suspect that 25 will, if and when that happens, it’ll be a massive bull run in the other assets, other than BDC.

Now, of course, BDC, we’re about to have a halving, etc. but that’ll be the main inflection point. Because, obviously, U. S. rate decreases have already been expected in a way. So, if they started happening, that wouldn’t come as a surprise to anyone. As I said, I wouldn’t be shocked if there’s a 20, 30, 40% correction, we might be already in the middle of it in the next few months.

But I still think we’re mid innings in this one. Okay, let’s go to the questions back from the audience.

[00:33:35] Adam: Can we invite you to intro.co? Many of us would pay good money for an hour of your time. Most experts on intro don’t need money, they donate it to charities anyway.

Maybe. I like doing these types of interactions on a platform like this one here, because it’s one too many and it brings scalability to my time being one on one with people, the option to cost my time is very hard. The thing that I’ve most limited in my life is actually my time. And that’s why. and I spent so much time optimizing for it. That’s why I have an army of virtual assistants in the Philippines, and general help structure, such that I can only do the things that I value.

So, unlikely that I’d be up for being in a platform like that just because I can’t imagine the amount of money you’d have to pay me for one hour of my time to make it worth my time, right? Like, I don’t know. $5,000 an hour or $10,000. Like it’s so high as to be ridiculous that I don’t think anyone should be willing to pay it. So, I guess the answer is no. I don’t think it makes sense.

[00:34:43] Does FJ Labs have an activist approach when investing in startups? How are you supporting the founders?

It’s funny because I misinterpreted what you meant by activists. So, here’s the thing. We are not on the board. We don’t lead. We don’t price. We don’t take board seats.

And yet, most founders we work with, believe we are the most helpful, partners and investors they have. And the reason is as follows. Other people like, whatever, FirstMark and Driessen, they’re amazing. They have this huge. portfolio teams where they’re going to have like recruiters and headhunters and psychologists and executive coaches.

We don’t have the assets under management or AUM to support any of that. So, we don’t do any of that. There’s one thing we will help you with. We are fantastic at it. That is our superpower. We will help you raise. Six months before you raise, we want to review your deck, review your metrics, tell you how you’re doing.

Whether we think you’re ready. Identify the VCs you should talk to. Make the intros to those VCs and then back shuttle on how it’s going. Now, if we don’t think you’re ready, we’ll also tell you that. We’ll won’t have the intros.

So, we give full transparency to everyone and we’ll make the intros to the top 33% or top quartile of the portfolio, to the best VCs.

Now, the reason this works, despite the fact we have 1100 companies in our portfolio, is we only need to talk to you once a year. I mean, we expect to get monthly or quarterly reports. But once a year, you’re only raising once a year. So once a year, as you get ready to raise, this is when we come in.

We have an amazing operating partner. His name is Jeff Berger. He’s essentially the head of portfolio or platform. And he’s the one who’s basically helping the board. He’s a former founder, very successful. Very thoughtful as a result, and he’s the one helping with all this, and he’s a quarterback, and then he calls me or the other partners like Jeff, Jose, or Arne to make the interest of IBCs at the right time.

So, we are extraordinarily supportive of the founders. We can also have conversations on strategy, exit, etc., but those are ad hoc. You need to make the effort. Hey, Fabrice. I have this issue or question. What do you think? And I will answer 100% reply, reply rate for sure. But we’re not going to be proactively seeking you out to see if we can help, except fundraising.

Now, the funny thing is, in 2021, people thought our superpowers useless because money was like free and infinite. Now it is extraordinarily helpful. Raising capital is extremely hard unless you’re an AI. And we are extremely helpful to two companies in that regard and also extremely thoughtful because we know what the market conditions are. And sometimes founders don’t really have a sense of what that reality is.

Go back to, a few of the questions that were submitted ahead of time, making sure I’ve covered them. Let’s see. Actually, sticking for a second to the question on crypto.

[00:38:00]Question was just asked is, “Is there going to be a fiat currency crisis where the dollar will be replaced? Will something like BTC become the reserve currency?”

So the answer is, there will be a fiat currency crisis, but not in the near term, right? Like, there’s no real alternative. BTC is not a good alternative currency because it’s deflationary in nature, which has a whole bunch of negative implications.

And when you think of, like, how strong currency or how effective a currency is, it’s kind of related to the alternative. And right now, if you look at the U. S. fiscal position, not great. We have massive fiscal deficits, which makes our budget deficits unsustainable, but it’s actually better than Europe.

It’s better, we don’t have competitive capital controls, and the lack of flexibility of let’s say, you’d have in China, the Yuan? And so, on a relative basis, the dollar remains actually the reserve currency. So, I don’t see that changing in any way, shape, or form in the next decade.

Now, do you want to diversify your holdings and have different types of assets, et cetera? Yes, but do I see a run of the dollar any time soon? No. Now, and also, sadly, humans suck at solving issues ahead of time. They only will respond to fixing things when there’s a crisis.

But the problems with the U.S. fiscal position are actually reasonably easily solvable. Like right now we have way too many guaranteed spending in the budget and entitlement spending. I could solve it probably 30 seconds from a sentence perspective. Like, if you if you move all retirement from defined benefit to defined contribution, both in the public sector and the private sector, you index the retirement age to life expectancy. And you increase it to whatever, 70, you know, life expectancy being a lot higher than today than it is, than it was when like Social Security was first introduced. And if you adjust the cost-of-living adjustments, or the inflation definition for cost-of-living adjustments marginally to decrease it a tiny bit, which actually could be totally reasonable, maybe because there are different definitions of inflation, you can actually solve the fiscal budget problem easily in a way. In 20-30 years, it’s completely addressed.

Humans suck at doing things ahead of time, especially when the costs are in future generations and future politicians. Nobody wants to bear that pain. And so, I suspect we will have to wait for a crisis of confidence in the dollar for the fiscal position to be addressed. But it is solvable, and it will be addressed in the meantime.

Because it’s still a stronger position, probably speaking to the other currencies, I don’t see a crisis of confidence happening here.

[00:41:15] Okay, let me open a few more, questions. Have you decided on your next adventure for outdoor travel that you’d like to tackle?

It’s a personal question, and I guess it’s related to the question, the fact that I had a big adventure in Antarctica a year ago, where I walked pulling my 100 pound sled and like negative 50 with one show, for two weeks to the South Pole, which is a big adventure.

I guess my current big adventure is, being a new parent. I have a one-month-old baby. Her name is Amelie and she’s wonderful. And she’s not as portable as will be when they’re a little bit older. So Fafa, my two-and-a-half-year-old son, you know, I can put him in a sling, and we go hiking and mountain biking and skiing, et cetera.

Can’t quite do that with Amelie just yet. When she’s a bit older, I have a lot of adventurous plans. I was thinking of snow kiting across Greenlands. I want to go swimming with the orcas in, Norway. I haven’t explored Southeast Asia much, so I want to actually go camping, hiking, completely off grid in Southeast Asia, in Tasmania, in Australia. None of which I’ve done. Mostly because of time differences and, and how far it is. You need to really schedule the time ramps that probably not happening in 24, 25, but yeah, 26 onwards. I haven’t been heavily skiing or, and back country skiing in Kashmir yet. I’ve been invited to do it in Pakistan, and in the Himalayas of write large as well in addition to obviously India.

So probably that’s on the to-do list. Yeah, I’m sure there are many more adventures to come. But nothing just now. Right now, the big adventure is being a new parent.

[00:43:11] Adam: I’ve heard that a startup should recoup their fully loaded Customer Acquisition Cost (CAC) within 6 months based on the contribution margin and then triple that amount within 18 months. Could you confirm if these numbers are accurate?

These numbers are accurate because think of what it is we want to be doing as VCs. As VCs, we want to be funding your growth. And so, once you have a custom acquisition channel that works, it doesn’t matter which one it is. It could be Word of Mouth. It could be a CM. It could be a sales team. Really irrelevant. As long as you have one that works and is replicable. And it’s just putting gasoline on the fire, then that’s fantastic.

And we want to fund that, with good unit economics. And by the way, the way your marketplace that works is as your customer acquisition cost goes down over time, because the network effects were kicking in and through word of math and more organic and more, ever more buyers are bringing more, ever more sellers are bringing ever more buyers.

And again, you don’t necessarily need to be there, meaning you, there may be, in the early days, the economics may not be as good as long as you can justify why they will get better with time as your take rate goes up, as your pricing power increases, etc.

[00:44:30] Raffy: What should the first 3-6 months of a new startup look like? Talk to potential customers? Generate demand? Build prototype? Validate hypotheses? Etc.

I would do a lot of that before actually launching a startup. So, before I decide to go all in, I would do the homework. So let me, let me check on my blog, which episode it is. I think it’s episode 9 or 10. 1 second, I will refer to it in a second.

So, episode 9 of Playing with Unicorns is how to come up with startup ideas in the three, four ways, like solving a problem you’re facing, personally, bringing an idea from one country to another, or bringing a model or an approach from one category to another. Probably the three main ways. And, but then you need to validate if it’s going to work.

And so, I would talk to at least 50 customers on the supply and demand side ahead of time. I would do a lending page analysis. So, you don’t build a website, you just build a landing page that looks beautiful. You buy it, whatever your sales approaches, whether it’s sales team or Google or Facebook ads, send traffic there, get a sense where the CPCs look like, look at the density of keywords, how much people could you actually buy if you had enough money.

And look at what the signup rate is. Talk to these people and try to get a sense of what the conversion rate will look like. And you can estimate usually what the conversion rate in the industry is. Something similar to that. This is the way you really validate the, the hypothesis. Once you’ve validated, there’s a market, there’s a need, the solution to build is the following one.

And so, you have it like a checklist. This is, episode 10 on playing the unicorns, which is validating your startup idea. And once you, once you’ve met all the checklists, then you go, and you build a prototype, and you launch. And then the first six months is actually about proving out that what you thought was true is true, getting the scale you want, and getting it to get to the point where you can raise your C around.

[00:46:33]Adam: Does FJ Labs have an anti-portfolio?

We should have one. So, we do have one kind of in the back of our head. Rather than explicitly on the website, but we could totally have one. There are 2 mistakes, I guess, in venture. I guess, 3 types of mistakes. Errors of omission, meaning you did invest in a company you should have invested in, that’s probably the entire portfolio.

Errors of commission, you invest in a company you should not have invested in. And then errors on selling. And you sold at the wrong time. You sold too late, too early, etc. We are, like every VC in the world, guilty of all three. We failed to invest in amazing companies we should have invested in at like the right time.

When I saw the Uber reasonably late, I passed in the first few rounds because the unit economic were not there. At first it was really a rich problem, guy problem. It’s like, Oh, we’re rich people and we want to share this black car. And then it was, like literally shared series and whatever Mercedes S600 for 12 people. To then, Oh, we’re a black car service using other people’s cars.

So, you know, the black cars. Again, felt in need this problem to then starting to work a bit better. And then I saw Uber at the 2 billion around and I look the mistake I made it. And I I love the team. I love the product. I love everything, except I looked at the numbers and it was like doing 100 million GMV, 18 million net revenues, losing 18 million a month.

And I’m like, Oh, I’m losing 18 million a month. It’s not that hard to build a company, making 18 million in revenues. How do I justify 2 billion valuations? Yeah. So, I wrote my investment memo by saying, I think I will regret this decision for the rest of my life, but having looked at the numbers, we can invest in this round.

Now, of course, if you write an investment memo starting with, I will regret this decision for the rest of my life, you know, you’re wrong. I should have followed my gut and should have invested. This is one example, but another one in gaming, could have invested the very beginning of Zynga.

I think I’d like, I don’t even, might’ve even been a one to three money valuation. And I’m like, you know, gaming. It’s going to grow both in Facebook and in mobile, but in the long run, gaming becomes head driven, costs go up, competition goes up, customer acquisition goes up, retention goes down. Not could be great.

And that analysis is correct, but in the meantime, you can still build a 10 billion business. So, whoops! Sold too early Tencent. I was an early investor in Tencent. They went public, and I’m like, you know, Chinese penetration at that time was like, 6%. It was obvious it was going to go to 95%, but in the U.S., ICQ, AIM, or MSN Messenger, I think ICQ sold in 270 million. Tencent is worth 400 million, even at high max penetration. How much is that really worth? And so, I sold everything. and then I looked at it for fun. I remember the ticker 700 HHK. 10 years later, or 15 years later, and I’m like, this can be right.

Like. I can’t be the same company. And of course, that 400 million company became a 500 billion behemoth. I probably left 200 million in the table. Like I, if only I not sold. So, what we changed in our philosophy there is we no longer sell everything. We typically sell 50%, when we think it’s overvalued because if it goes to zero, we sold 50%, we made five, 10 X, whatever we’re happy.

And if the rest grows through the moon, great. So, if it goes to zero, we’re happy, we still, and if it goes to infinity, we’re happy as well.

[00:50:28] Martin: Do you have any thoughts on the longevity industry? Do you think platforms like Hims or Ro will evolve in that direction, or will there be a new player?

So, longevity, of course, is a hot topic. and there was a lot of improvements being made. In fact, we invested in a studio slash incubator building biotech longevity startup. So, the company is called Cambrian. It’s created by James Peyer. It’s absolutely amazing. He’s absolutely amazing and extraordinarily bullish on the category.

Now, I think that I can see the hymns in the row going in that direction. As long as they’re established protocols for what to do, and I, I guess there’s a set of supplements. You can take a set of now. The reason I’m clear to me that that’s the solution. I mean, maybe there’s a, I can see Hims and Ro going into like whatever GPT one inhibitors for obesity.

But longevity is so many multifaceted, right? If you look at what Brian Johnson does, and, and I do a lot of that stuff as well, right? Like from intermittent fasting to red light therapy to cold plunges, et cetera. A lot of it is also not just medical or supplementation. And then there’s the supplements you can take.

So, it’s going to take, I don’t know. I suspect that when new companies, new companies will emerge, I can think of a few buckets. Bucket one longevity spas, if you want, like, one medical for longevity where you go in and it’s a combination of like, whatever, sauna, cryo, nutritious, red-light therapy, et cetera.

Number two, supplementation type company, and or medicine type company. So, the Hims and Ro and road can play there. And there might be new startups as well that build legitimacy. I’m trying right now, a product called anda.co to replace all the supplements I’m taking. You know, like vitamin D, and Omega 3, et cetera.

And then biotech, like actual new development and the way the biotech companies are approaching it right now is. Many of the diseases that humans face is driven by aging. So, cancer, heart disease, Parkinson’s, Alzheimer’s, they’re all driven by aging. And so, even though they’re creating Drugs to attack these in a way they’re indirectly attacking the agent.

So, definitely a lot of companies were going to emerge in that category as well and very bullish on the opportunities here and our improvement and knowledge is increasing. I mean, think of it. We’re all wearing these smart watches with all this data. Currently, the medical profession doesn’t use them at all.

So, functional medicine is becoming way more relevant and it’s coming of age.

[00:53:33] Adam: I’ve listed things that I heard you consider when rating a startup. (1.) Team (2.) Unit Economics, significant TAM (3.) Fair deal terms, reasonable valuation, (4.) is it beneficial to the world, aligning the general direction of global trends, offering new opportunities to those with fewer opportunities. Is there anything else?

So, is it beneficial to the world? I see four, three big problems today that I’m trying to address. One is inequality of opportunity. Can we make things cheaper and available to all? The good news is I think the technology revolution writ large is mostly geared towards doing that. No founder just wants to build a problem or solution for the 0.1%.

Maybe, yes, when you release a cell phone, it’s only available to Gordon Gekko. But ultimately, you want everyone to have it. And make things as widely distributed as possible, as cheap as possible. So, the Internet, to me, has always been about cheaper, better, faster, and inequality of opportunities mostly being addressed by that.

Number two, climate change, and then number three, the mental and physical well-being crisis. And actually, on the physical side, the longevity stuff falls here, and then well-being side, probably the, Combination of, like, the mental health startups probably fall there. but no, these are the core categories.

I mean, I think of it as like, yeah, team, business, which is TAM in economics, deal terms, and mission, and this is something I care about.

[00:55:02] Cuddlehead: What build did I play at Elden Ring?

Because I’m not as good at the Demon, at the Souls games as others, I played the easy class. I mean, there’s no difficulty setting, right?

It’s all reasonably hard, but by being an astrologer and shooting from afar and not fighting head on, I was able to finish Elden Ring. That was my 2022 project. and I played with my brother, and my brother is a samurai. And so, the two of us together as a tag team, me shooting before him up front, that worked really, really well.

I’m actually very excited for Elden Ring’s expansion to come out in a few months. and I’m sure we’ll be playing a lot. In 23, I finished Ragnarok and now I’m playing Helldivers 2 at co-op with my brother and friends and we’re having a blast and still play Age of Empires for fun on the PC.

[00:56:00] Did you have any mentor in your angel investor career? If yes, who is it? And how does the person help you?

o, I didn’t really have mentors in general. Growing up in France, in the 80s, where there was Minitel and the PCs, I looked up to Bill Gates and Steve Jobs, who were building the tech revolution, but I didn’t know them.

They were not mentoring me directly. Angel investing, I started angel investing when I first became a founder. I became a founder in 98. And immediately, because I was visible to the world as a thoughtful, successful, consumer-facing intranet entrepreneur, I immediately started being approached by people saying, can you invest in my startup?

And I actually thought long and hard. So, of course, there were not really angel investors back then. I was starting from nothing. And so, I started thinking through, okay, should I be an angel investor? Because of course, it’s a distraction from being my mission of being a CEO founder of startup. And ultimately, I argued the following, if I can explain lessons learned to others.It means I’ve internalized them. It makes me a better founder. And if I can keep my fingers on the pulse of the market by meeting all these founders, especially in marketplaces, I’m running a horizontal multi category site. If I can meet all these vertical founders, then it makes me a better founder.

So, as long as I decide very quickly. So back in 98, I created this, four selection criteria. You know, and the way I would evaluate startups, which is still frankly the same one I’d use today. So, in a one-on-one hour meeting, I would decide if I invest or not. I’m like, it’s okay. So, it didn’t have any mentors in angel investing.

I don’t have a mentor in VC. I would describe myself as an accidental VC. I’m definitely an accidental VC. When I sold OLX in 2013, I like building companies, like investing companies. I partnered with my angel investing partner, Jose, and we built FJ Labs really as a family office for us to be angel investing and building companies, and that took a life of its own.

And other people said, hey, we want exposure to what you’re doing. Can we invest with you? That’s where we became a VC, but we’re not a real VC, a normal VC. I mean, again, we, we have our portfolio for each fund. There’s like 500 startups and we decide in two one-hour meetings if we invest. I think I would describe what we do as angel investing, at venture scale.

We’re angel investors. We just happen to have the capital deployment capability of normal VCs. But yeah, we’re angel investors.

[00:58:49] Are you tempted to invest in AI?

Again, if I see a project where it’s vertical, proprietary data set, clear monetization set path, and the valuation is reasonable. You know, it falls in the norm, then yes, but everything I’m seeing is not that. It’s like crazy valuations are like super bubbly when not differentiated.

And by the way, I would argue. Every company I invest in has AI. Everyone’s using AI, everyone’s building an AI. They’re not AI companies, but they’re using AI. So, every investment I do, I would say, is an AI investment producer, though it’s not marketed as such.

So, not tempted in doing the game of Kings, like open AI versus whatever, Misra versus others. I mean, 10 years if I invested at the beginning, sure. But I mean. And even the way they’re structured, et cetera, is odd. We’re also playing it indirectly. We’re investors in an amazing company called Figure.

Figures making these humanoid robots, where they want to replace pickers and packers in Amazon Lots Mile warehouses, for instance. And they’re embedding OpenAI’s AI to interact with the real world. So, they’re also kind of an AI company.

[01:00:08] What’s the most overused buzzword that you can’t stand?

It varies, right? It used to be ESG. Maybe for a while, it was crypto, like in the last bubble. Right now, I’m sure it’s AI. It has to be AI. Everything’s AI. Every company’s saying they’re doing something AI. And most of the large companies are not, right? So, it’s not true.

[01:00:37] Jassim: What valuation of a company is risky, yet a bit safe and worth the squeeze?

It’s not the valuation in its own is not sufficient. It’s the combination of valuation and traction and team and opportunity. And so, when I look for, when I invest, and I invest at all stages, pre seed, seed, A, B, et cetera, it has to be fair.

Nothing’s cheap in tech. It has to be fair in light of traction, opportunity, team. And I have a blog post on my valuation matrix where I talk about what are the median valuations that precedes C to A, B and onwards based on traction and the fair valuation is there.

[01:01:25] Lacey: Hi, Fabrice. Any particular places or people you prefer to keep up with your bio health updates? And thanks for your time today.

Obviously, the well-known people are Hooperman or Pete Atia. Honestly, I don’t follow their podcasts or listen where they say it’s just too much content and they’re too long and too slow.

I’d rather have a synopsis of it through my personal functional, medicine doctor. You can read the last, Pete Attia book. So, he first wrote, I think Lifespan or Longevity. Let me find the name of the book. Recently read it. I’ve read 20 books since then. So, give me a second. Let me find the name of the book.

If I recall correctly, it’s Pete Attia’s book. Yes! Outlive – the Science and Art of Longevity. And there’s a good sense of like, what it is you should be doing in there that makes sense.

[01:02:38] Adam: What is a surprisingly cheap and effective marketing channels? And people will have mentioned that LinkedIn can be effective if used Elon Musk has stated that ads on X tend to over deliver.

I’d say TikTok probably is a, if your audience is young, in two ways. (A) you can create content on TikTok that is that reaches a large audience quickly and inexpensively.

And (B) you can buy ads there. They’re also inexpensive and effective, but it depends on what you’re selling, right? Like, as always, the answer on what is the right channel for you is it depends, right? If you’re selling, high end, B2B SaaS software, TikTok is definitely not what you’re going to be selling that.

So yeah, TikTok’s rather effective. No beautiful new channels coming up and so the traditional channels work. They become less effective because of the Apple removing the tracking. So, tax have gone up on both on Facebook and Google. But nonetheless, you can do you can still usually make economics work if you have the right business.


[01:03:50] Jassim: As an investor doesn’t make sense to look for opportunities other than AI even though AI is “hot” now?

Yeah, absolutely. I think right now you don’t want to be, you want to be contrarian in general. You don’t want to be investing in AI when everyone else is investing in AI. So, when everyone is doing crypto in the last bubble, I sold everything and in 2023, I bought everything.

I started buying again. And now I’m rebalancing the portfolio based on lessons learned. AI, I’m not investing in AI explicit companies because the valuations are insane. And, and ultimately do I think there’s a real business at the end of the day, when a company is going to be valued at exit in either by an inquirer or by the stock market, it’ll be net present value of future discounted cash flows.

And I need to be able to see that in differentiation. And right now, all these companies are raising insane amounts of money with no business model and no differentiation. So, I do everything else. What I’m mostly focusing on right now is digitizing B2B supply chains. Because in a sense, it’s extraordinarily boring, but so profoundly important in the consumer world, you have these amazing user experiences.

You have Airbnb, you have Uber, you have DoorDash, you order on Amazon, you get anything in a day or two. I mean, it’s glorious. And then you go to the business world, and you can’t order anything online. You have no pricing, no availability, et cetera. Penetration in B2B is sub 1% in most categories and a, and it’s definitely sub 5%.

So, we have infinite and trillions and trillions of dollars of GDP. We have an infinite way to run. So, you need to digitize all inputs. that’s a massive category you need to do SMB enablement. We’re at the very, very, very beginning. And so, I think this is more interesting and deflationary and it’s gonna revolutionize the world and it’s going to run for 20 years.

[01:05:53] Martin: What are the most incredible business opportunities you have seen in preventative health lately?

Hmm. So, preventative health is fundamentally important, right? It’s also a lot cheaper than fixing problems. What is the biggest opportunity? Unclear to me. Also, you need to realize it’s not what I focus on.

I’m interested in longevity out of intellectual curiosity, but I like acid light businesses. And that’s why I’m not personally building or investing in biotech type companies. You know, the GPT 1 inhibitors, obviously, like, Ozempic, are the ones that have won and have been the most helpful in the category here.

And I would argue they are preventative because they’re helping you address all the, the co-Morbidity disease factors that go with obesity, right? Obesity is correlated with everything from cancer to heart disease, etc. Diabetes. so not sure where the opportunities lie. I haven’t spent that much time thinking about it. But clearly, I would like that to exist.

[01:07:04] Adam: Can you name successful blockchain based marketplaces that work with goods other than NFTs?

So, for NFTs, we’re investors in Blur. For non NFTs, no, but I’m not sure that’s also the main use case, right? Like, for transacting real world assets in the blockchain, you need a reason for it.

Like, do I want a blockchain? Like, does having a decentralized ledger that is open and public bring value? And I think for most things, the answer is no. The one thing that I like to do to bring on is actually the real-world assets I want to bring online. So, it’s not about lending protocols, not like centrifuge, stuff like that is actually traditional finance.

That’s why Midas is bringing T bills on chain, and in the long run, I want to bring bonds, equities, and everything else. And the reason is, the way our traditional financial system works is completely ridiculous. So like, if you want to buy stocks or sell stocks, you need to go, you go to your bank, they contact a broker, they work with a custodian, right?

Like there’s so many levels of intermediary. If you’re selling a stock, you’re selling a Tesla stock, it’ll sell in two or three days. And the markets are only open during business hours. That makes no sense. So, if there’s something I would like to bring on chain, from a marketplace perspective, it’s for traditional financial assets.

And so, Midas, which is bringing T bills on chain, because it’s a 30 trillion category, and it’s also the easiest way to do from a legal perspective, that we’re not in the U. S. yet. I’m working on a U. S. entry strategy. I want to build, I want to bring bonds. And possibly equities on chain as well, and these types of assets.

So, to me, that’s the real-world assets. I want to bring on chain rather than good. So, I don’t I don’t need an eBay on chain. You know, there is value in the central light where the central authorities do it, right? Like, those are not an effective governance structure. People are using DAOs. For legal reasons, right?

And no founder has ever said, oh, I would like to have decentralized voting in the community to decide. Every founder is like it. Founders want to be enlightened dictators. They may or may not be enlightened, but they want to basically be able to decide and move quickly. The reason they use DAOs and they use decentralized structures is because many of these DeFi companies or If they were not or illegal, I mean, they’re violating U. S. Securities law, and so they’re being decentralized to just be a software protocol to not be violating U.S. Securities law, but that’s not actually the way they would like to be structured. And so do I think there is value in a, in the centralization, like Airbnb provides extraordinary value in terms of, like, filtering the span, the spam, the scam, do customer care and giving you money back insurance on your property, et cetera.

So, a completely decentralized version that didn’t have these things, it probably wouldn’t work and wouldn’t make that much sense. So, for financial assets, they make the most sense. So, I absolutely want to bring financial assets on chain. It’ll be a few years because, my friend, Gary at the SEC, doesn’t necessarily agree with a lot of these ideas that I think the banks or also the incumbents, or don’t want to be disrupted. But definitely the, the area that I. the most excited about, in general in the crypto space.

[01:10:32] Jassim: I definitely feel a new founders especially these ages of shiny object syndrome. Not all by many.

Well, that’s always been true. Uber for X is a big trend. Like everyone wants to go to the new, new thing, whatever the new, new thing is.

And I don’t blame them. And if you can do something meaningful and powerful in AI, it’s extraordinarily, it’s amazing. I’m most talking from the approach of as an investor. I actually think it also is true of the investors. The investors are all chasing the new thing. They’re all like lummox, right?

Like, oh, this is hot. Whatever it, this may be. And they all follow it at the same time. VR for a while, then whatever Uber for X or. And, and now it’s AI. but you really want to be contrarian. And it’s okay as a founder to want to do something that’s meaningful as long as it, and that that’s exciting.

So just understand why you’re doing it. You’re doing it because you think it’s a get rich quick scheme. probably not the right motivation. It’s something that you’re like, oh, my God, this is funnily exciting and interesting. I can spend the rest of my life doing it. Go for it.

[01:11:39] Regarding Firgure.ai, when, in your opinion will we see humanoid robots in our daily lives? 3 years? 5 years? 20 years?

Humanoid robots. Well, so Adam, the question is, as usual, is it depends, what do you mean by seeing them in daily lives? We will see them in back in like warehouses before and in factories before we see them in your household. The issue with household is like so many different variables that you need to take into account in terms of like.

You know, that’s people to run into activities that can do, et cetera. So, the Jetsons, future, I don’t see in the next 5 years, robots becoming way more commonplace in our lives. And we will see them because they will be interacting in factories. I can see it in, in, in, in 5 years. I don’t mean humanoid robots or robots already present or omnipresent.

Like, you go to car manufacturers, it’s all robots, but humanoid robots and in warehouses, yeah, five years, I think will become more and more common, but not in our daily lives. So daily lives still too expensive, right? Like, too expensive. Use case too limited. Doesn’t work particularly well just yet. So more 20, yeah, 15, 20 years is probably better.

By the way, same thing with self-driving cars. We’re getting closer on autonomy. Well, do I think in the next five years old cars will be self-driving? Absolutely not. So, it will start gradually. It’ll be like, oh, trucks on highways for long distances, you know, and little by little, starting set expanding and we’re finally in the car.

So, you know, another example, by the way, the hype cycle, speaking of AI, when self-driving started becoming a thing 10 years ago, or even 12 years ago, I was like, oh, it’s gonna happen in the next 5 years. And now we’ve reached the, so that was the peak of the high cycle. Now we’re probably at the bottom of the, like, the valley of disappointment and despair, where everyone’s like, oh, it’s never going to happen.

Actually, now I think it’s starting to become interesting. We’re now getting the point where the cost and effectiveness is such or efficacy is such that we’re going to start seeing interesting use cases. So, all that to say, this is again, this is now becoming interesting time to look at it and think through the implications and considerations.

Again, you want to be contrarian. I suspect something similar might happen in AI in a few years. We’ll be like, Oh, my God, why is it not showing up in the productivity statistics? Why is it not being implemented by big, big companies, et cetera.

[01:14:15] Cuddlehead: Do you think asteroid mining is an industry that will become feasible or profitable within our lifetime?

I don’t know enough about this to be able to pine effectively. Obviously, I can think through what the economics of it look like. It’s like, what is the cost of like getting in this space, the cost of mining, bringing it back, versus the value of the minerals. The answer is I could see it possibly be yes, as an answer, because the cost of going to space is declining dramatically.

And of course, should decline dramatically if Starship is successful. And if we can launch Starship type launchers at scale that are reasonable at very large capacity, I could see it happen. I haven’t done the math though. If Starship is cheap enough to actually make asteroid mining cost effective, but I don’t think it would be all that hard to calculate actually.

So, I think in 30 minutes, you can probably answer that question, feasible, right? Costs of launches declining all the time and will continue to decline. These things are moving slower than we would like them to. Elon is notoriously optimistic on his projections, but that’s okay. I think all founders are notoriously optimistic on their projections.

But do I think the launches, reusable launches will be increasing in frequency and lowering in costs? Absolutely.

Other questions, that were submitted ahead of time.

[01:16:08] We continue to see economic sentiment down, given the cost of money felt by consumers. Curious, given how you feel, especially the dire US consumers in Macroeconomic update where you see bright falls, bright spots in the landscape?

So, I kind of touched upon this, briefly at the beginning. The Economic environment has actually been more favored, more resilient than I would have expected to be.

I expected a recession in 23 because combination of the debt levels, the consumer side would be very high. Inflation is still at that time reasonably high. Rates impacting, especially commercially real estate a lot and a number of banks falling, decreasing overall lending and basically a massive movement of capital away from banks into T bills because they’re safer and higher yielding, which, is leading to bank lending to collapse.

And so, when you put all these together, and I like just geopolitical uncertainty and a few other factors of like, I would have expected a recession and yet the consumer has been extraordinarily resilient and short, you know, currently we saw full employment, unemployment, inflation has decreased. And productivity, so those are shockingly good.

Usually, tech productivity doesn’t show up. So, people have been saying, where’s the productivity from the tech revolution and statistics, and I don’t think you’re ever going to see it, honestly, because tech is deflationary, right? Like, if tech makes something free, it’s calculated as a decrease in GDP. So, if a 2, 000 computer Next year becomes a 1, 500 computer or a 1, 000 computer when it’s sold.

That’s a decrease in GDP, even though it’s a better computer for cheaper. And so, I think, you know, most of the things, a lot of the things, not most of the things we consume online from Google to Facebook are free. There’s a tradeoff where you give up your data in exchange for having access to a free service.

And all these things are not, you know, don’t show up in the productivity stuff. So, I’m actually rather I’m more optimistic than I was in the macro environment. and we may very well have this, notorious soft landing. So back in the last 70 years, we’ve only had one soft landing where the Fed engineered a slowdown of the economy that was overheating because of high inflation without a recession.

And that was in 93, 94. Every other time, when rates rose, we had a big recession, or a recession, not always a big one. A big one if you raise a lot, like in 82, 83, when Volcker raised rates. And we’ve had the biggest increase in rates, since then, and ever except for then, basically, and it looks like, shockingly enough, and to my surprise, and by actually pleasant surprise, we are going to have this, very rare unicorn-ish soft landing.

So actually, rather optimistic on the general global macro. Now there’s still massive political and geopolitical risk. that kind of acts as a democracy sword, overall, but, that things are looking better than I would have expected. And it looks like we’re navigating issues like commercial real estate prices, et cetera.

[01:19:35] Whom do you think had the most impact on your investing thesis?

Honestly, no one, what we do is really profoundly different. I never did an analysis saying what is the correct, the best strategy for investing. It was really bottoms up. It was like, I see company, I see a founder. I like him. I invest. I don’t like it, but it’s literally that simple. It’s a bottoms up approach and not top down.

I didn’t do a top down. Now, what are the lessons learned from the most successful funds in history from a venture perspective? And our strategy is completely different. Now, the data supports the strategy we’re following.

So AngelList is a lot of data on what are the most successful investing strategies. And it just so happens that a diversified strategy is by far the most successful strategy, but it’s, it’s an accident of history that my angel investing strategy, which became angel investing at venture scale in FJ Labs.

Is the correct strategy and that I like diversification because my intellectual curiosity pushes me to like diversification. I’d like meeting a lot of founders. I’d like, I mean, the world has so many problems and each of them needs to be fixed by various, you know, climate changes on one problem.

It’s emissions. I’d like whatever a cement plant or cars. I mean, it’s a thousand little problems. Founders want to solve one sub niche, and I want to help all of them solve all the world’s problems. And so, as a result, my intellectual curiosity is making me be a diverse investor, and it just so happens that it’s very successful.

But it wasn’t. It wasn’t top down. It wasn’t thought through, and there was no real inspiration. It just happened to be that.

[01:21:16] Is there something you’ve seen in recent startup pitches that you think the general public should know?

I’ll approach this differently. Many people are like everything that needs to be done and I wish I’d been building a startup 20 or 30 years ago because then what needed to be built was obvious.

We’re still at day one. We’re still at the very beginning of the technical revolution, even in the consumer facing world. We’re at 20, 25% penetration at best in most categories. So that it still has like 3, 4X to go or more in some cases. And in the B2B where the very beginning. And even things that I think incumbents can be reinvented with new business models, new approaches, et cetera, like, so marketplaces, the old way of running, marketplaces was you say what you’re looking for, people apply, and they converse, you know, you go to Upwork, you get hundreds of applications, you interview them, you pick one. Extraordinarily, a huge amount of work. Now, the new way is you just say what you need, and the marketplace says, this is the person for you, done.

This allows you to reinvent a lot of verticals, a lot of categories, a lot of ideas. So. This will be common, or I guess all this to say, we’re still at the very beginning of the technology revolution. This is still the place to be. There’s nowhere else that you’re going to be able to impact as many people on such a large scale and actually move the needle for millions of people in the world.

And everything remains to be done. In fact, nothing has been done yet. And so, it’s still the best time to be a tech founder, to be a tech investor, and to be in this category.

[01:23:00] Gonzalo: When it comes to crypto, how game changing do you consider the ETFs to be going forward?

I kind of answered this already, but I’ll recap very briefly. The BTC ETF was key because of the inflows that it brought, and they’re still bringing is actually re igniting interest in the space, right?

The reason we’re in the middle of a new bull run is because of the BDC ETF inflows have been much greater than expected and will continue to come because it is now programmatic. A lot of funds now say, oh, as part of my portfolio, I want 1%, 2%, 5% in BDC. Whenever the AUM goes up, they just buy more BDC.

So, it’s been game changing, will continue to be game changing if the ETH FTF gets approved. I don’t think it will be approved in 24 to be clear. I do think there’s a high probability in 25. It will continue to be game changing in terms of capital inflows, use cases, et cetera. And I’m, I would love an EFBTF to be approved because then it probably means proof of stake is not a security and you can actually do a lot of interesting things and will be revolutionary.

And also, then the applications on ETH, you know, the way I think of ETH is it’s a decentralized AWS or platform in which you’re building applications, then start getting a lot of value. So, I think it is game changing, will continue to be game changing.

[01:24:22] What is the ideal number of founders per startup? Two, with one being technically oriented the other more focused on people and sales?

Two is the best number. I don’t know if there’s an ideal number. It could be one, it could be two, it could be three. The two when it works well is the best, but two founders fighting is also one of the main reasons companies fail. So, on average, I say two. Depends on the category, by the way, on what the correct founder mixes.

In some cases, it’s a technical problem. So, technology founder and a sales strategy, whatever founder makes sense. In some cases, you know, you could also make an argument. It should be COO/CTO and CEO or head of sales, CEO/ CTO. So three, it really depends on the problem you’re facing, right?

Obviously if you’re building an AI company, you want the best tech founder. If you’re building a marketplace for B2B, the technology is not going to be the hard part, but the getting the credibility to get access to data to convince the incumbents to change their approach is going to be a lot harder, and so more sales operations, marketing is going to play a much larger role. So, your founder makeup depends on the category of what you’re building.

[01:25:43] Jean Philippe: Bonjour Fabrice. What are the most important skills that students should develop in order to work as an analyst in a VC fund? What are the qualities you’re looking for when recruiting graduates?

So, we do have an analyst program. We recruit graduates from college. Be thoughtful, be logical and be embedded in the space, right? Like, so if you’re spending all your free time thinking about startups, working in startups in your summers, you have a perspective on what are the companies that you think are amazing, interesting, and, you’ll be more, you’ll be more attractive.

Now, in terms of what you major in, kind of irrelevant. I mean, whether it’s economics, computer science, et cetera. At the end of the day, we are going to look for signals of willingness to work hard and intelligence. So, because we’re only recruiting 2 every 2 years, we have a 2-year analyst program, we currently only recruited the Ivy League schools, and we’ll take the highest, you know, the top, whatever, 1% of students from a GPA perspective. People that have shown a willingness to work really hard that are really smart.

But beyond that, because there’s still a lot of those people, yeah, knowledge of the category, thoughtfulness, and people that are also jive with us. We’re kind of all nerdy people, like in my free time, I like write blog posts and actually I code my blog. I code my sites for Triton. I’ve coded an interface for my home between Alexa, and everything of the home environment. And we play video games, you know. So, people that are going to fit right in with, you know, we play sounds like a plan or whatever.

[01:27:34] Lacey: If you live in a different time past or present, what do you think you would do professionally or future?

So, people idealize the past, but the past kind of sucked, honestly. 200 years ago, your life expectancy would have been 29. Most of us in the, you know, in this audience right now would probably be dead.

We lived horrible lives. We are so privileged to be living in the world we live in today. We have a quality of life that the kings of yesteryear could not even imagine. I mean, because we only work, I mean, on average in the West, less than 40 hours a week, we can go on vacation. We can ponder the meaning of life.

We can try to think through fulfillment. In the past, it would have been all survival all the time. So, you go 10,000 BC or before when we’re hunter gatherers. We’re just nomadic and constantly trying to find whatever the new mammoth and trying to find food to eat. Would have been, you know, a rather difficult life.

Then we became farmers from 10,000 B. C. to, let’s say, 1800. Again, we’d be suffering from starvation multiple times a year, our crops would fail, there’d be disease. We were surviving. There was no self-actualization. Yes, there was a, tiny percent of the population that could be better off and could do their own thing, either because they were the very high end of the nobility or because they were intellectuals or artists that had been paid for by the nobility and the rich, but they were far and few between, right?

Like the Da Vinci and whatever lightness Michelangelo’s and Voltaire were far and far between. So would it be interesting to observe the Roman Empire and the rise of Augustus? Absolutely. Would it be interesting to meet Da Vinci and to be the founding fathers in the U. S.

Absolutely. Would we really have liked to live there? Probably not. I think life in the future is only going to get better. I can imagine a world 100 years from now where you have these Star Trek replicators, right? Like, imagine a comic level 3D printer where you say you want something, food, a cell phone, whatever it may be, and you get it, or a holodeck.

I mean, it’s going to be amazing. And it’s going to be because tech becomes cheaper, you know, so essentially all these things. Tech has made things significantly cheaper over time, like food is much cheaper than it was 100 years ago, 200 years ago, flying in a plane, these cell phones, computers, everything is getting a lot cheaper.

So, I can imagine a world where the marginal cost of electricity is zero because we’ll have infinite electricity through solar and or fusion. And then with your atomic level 3D printer, most things will be free. And in that world, you’ll be really able to think through, how do you self-actualize?

What is your purpose in a world where you don’t need to strive for, work for survival, basically? You will work because you want to. You’ll want to be an explorer in a starship. And maybe there’ll be, you’ll recognition the personal value you get out of that. So, I think the future is going to be extraordinary.

And we’re here as founders and as VCs trying to build it and make it happen. And I’m beyond excited for it. So, I think the future is interesting. I’d like to live through, these different moments in the past and see how they were like on a day-to-day basis. But I suspect that our reality today is glorious, right?

Like, yeah, even the Kings. And I know Jacin would like to experience living like a King and there are moments where it’d be good, but. I don’t know, like the idea of like not having toilets and not having Indoor plumbing and etc. I mean, when I go on these crazy adventures, like I go to Antarctica where I need to like poop in a plastic bag and carry it for a few weeks and I need to melt snow in order to cook my, rehydrate my food and there’s no shower, no nothing. That’s kind of like what living was like back in the day. And you come back from that and you’re like, OMG! We are so privileged. We are so blessed.

We are living such positive, beautiful, amazing lives, and we should appreciate them more because we are the luckiest people ever. And so, I have so much gratitude.

[01:32:08] Adam: My main competitor received ~$200 million in recent debt round in 2021, and $490 million in 2019 led by SoftBank. I think that’s a good sign for me because they started 2007. So now they’re too big and too slow. My startup is like a small pirate ship that can easily change direction, add new features, et cetera. Am I wrong?

That web and the internet in general and startups are a world where the fast beat the slow. It’s not the big that beat the small, it’s the opposite.

The smaller nimbler faster typically win. And getting money from SoftBank in 21, usually puts you in a very bad position. Your watermark on the valuation is too high. You probably spent too much. And so even though you had a big debt round, you may have actually used it ineffectively, and now you’re facing issues.

So, I totally agree. That’s why I never worried that much about like all these anti-trust cases in tech are funny because as soon as they go after the company, you know it’s too late. You know the company’s ready on the way down. Like when IBM was set up, based on the antitrust in the early 80s. They were already being beaten by the clones when Microsoft was being attacked by the DOJ in the late 90s and early 2000, they were already being disrupted by the Googles of the world.

And now they’re going after by whatever Apple and Google. And I’m like, meh, OpenAI and others are going to disrupt them. So, I don’t worry all that much. There’s so much disruption. So yes, the small will eat the big and run circles around them. So, I wouldn’t worry too much about that.

Okay. One hour is in 90 minutes in, sorry, 90 minutes in. One hour and a half in. Let’s see if they had other previously submitted questions that I didn’t cover yet.

No. Whoop, sorry. Emails. I should have probably done it. Tech startup cannibalism and premature obsolescence. Whoa, one second. I probably should have read this earlier. Okay.

I guess three sets of questions, submitted by Oliver Blaise or Olivier Blaise. One on productivity and lifestyle. So, I did an episode on playing unicorns, not that long ago, see the name and title on how to basically be productive and how to lead a life where, oh, it’s actually 44, the last one.

And I explained how I outsource most things in life. And so, the question here is, what do you do with GPT versus virtual assistance? And the reality is I use the virtual assistant in the Philippines for most tasks. In fact, they will use GPT instead for me. What I do with GPT, honestly, it’s like more very targeted tasks.

Like, oh, I forgot how to code this function on my blog. Please send me the CSS for that. Or research, just research on different topics. The VA’s do the everything from calendar management to actually uploading the blog posts that I write on the on the blog and getting everything ready. So, are you sharing your personal assistant with your partner or home stuff?

So, the personal assistant that was dedicated to me, my butler slash estate manager is dedicated to me. But the, my partner and I share the entire staff for the home, and we have like a team for the child rearing, I guess. And I covered how I do it with, 4 or 5 people, that work one at a time, but 7:30 a.m. – 7:30 p.m. with a shared doc, et cetera. So, watch episode 44 for more information here. So, in that episode, I also talked about how I live across different cities. Between Turks and Caicos, New York, and the question is, how does 1 do that? With children, I’m obviously extraordinarily privileged to be in a position to have kids that are young enough that I can actually just take them with me everywhere.

New York is going to be your main base. My son is going to the Ecole, which is a French American school, which is trying to blend the very best of the French system in terms of, like, intellectual rigor with creativity and public speaking and team building of the American system.

[01:36:54] And one more question about Olivier about investing in France. What do you think of the system?

So, it’s interesting. France used to be a backorder of investing and that’s come a long, long way. I think Xavier Niel, the founder of Free, can take a big credit for building a school and an incubator, that is now become an ecosystem for a whole bunch of new startups.

And so, the incubation plus the school, I think, Station F and 42. And so, France, because of that, has become way more relevant in terms of a tech startups. Now, the very best founders office still leave to go to the U. S., to build companies in the U. S. Because of course, you’re going to build, might as well go build for the largest market. But it’s definitely come of age.

One second. Let me go see a few more questions.

[01:37:48] What do you think of digital biology?

You know, so I don’t spend enough time looking at this. But of course, where are we seeing AI biology, the best example of that is for the AlphaFold. And so, it’s where you’re seeing the folding of the proteins being done in a gamified way, as a means of trying to find new drugs and drug compatibility, et cetera. So AlphaFold is absolutely innovative and has done and found things that were not possible before, and I suspect more of that is happening, not following, and that’s a question from Natalia, on a day to day basis. So, can’t comment more intelligently than that.

Let’s see, there’s a few more. Macro-OP, DC structure, and I’ve covered that.

[01:38:41] With your milestone birthday coming up, I can’t wait. What adventurous ambitions are you most looking forward to in the next half century?

Even interesting, my friends made a 40th birthday video for me. And the main recommendation there was, like, whatever, get married, have kids, and I’m, like, poo pooing that vision and concept. So, I’m turning 50 August 3rd of this year. A lot has changed in the last decades.

A lot has also, in a way, has not changed. I’m still a tech founder. I’m still optimistic. I still love the same things, from kitesurfing, to paddle, to video games, to tennis, to skiing, et cetera.

I’m looking forward to what the next few decades. I mean, I’m a new parent. So that adventure in parenting is going to be extraordinary. And also, I actually am excited. We are going to rise to the challenge of the 21st century. We are going to address inequality of option E. And climate change and the mental and physical well-being crisis, and we’re going to do it through technology, and I’m excited to be in the midst of things and to both help bring it about and see it happen.

And so beyond excited for what the decades to come have to bring, and it’s hopefully with the longevity that we’ve also directly invested in and the progress we can continue to have extraordinary health span, right? So, it’s not just longevity you want to have, you want to have healthy longevity. You want to be able to keep doing all the things you love intellectually, personally, physically, etc.

[01:40:14] Jean Philippe: What is the dream guest you would like to have on the Playing with Unicorn podcast and why?

First of all, Playing with Unicorns has been lots about guests, and it’s been really sharing thoughts and perspectives on so often it’s been just me talking, right? Usually this is asking me anything, but it’s usually been like, how do I raise capital? How do I create a perfect deck? I do like guests, who are extraordinarily thoughtful. One of the most interesting episodes was a conversation I had with Christian Angermeyer. Who was kind of my doppelganger, and I didn’t even realize it. It was like 2-hour, wide ranging fascinating conversation and so more like that, right?

Because the obvious answer to the question, by the way, is Bill Gates in terms of understanding everything he went through and why he decided to transition from Microsoft into the Bill and Melinda Gates Foundation. What they’re doing today, or Elon in terms of, what, where he’s at, where he’s going, what his perspective is and going through his life.

So, the obvious answers are like the Bill Gates and Elon Musk’s of the world. Maybe the more interesting answer would be what are the people like Christian Angermayer that I talked to that I didn’t know before that we’re gonna have this amazing intellectual personal connection and we’re gonna have a discourse and bring or thoughts to further new level.

And I don’t know who those people are. You know, I do Playing with Unicorns kind of, in my spare time. Which I don’t have that much. So, it’s an occasional show, but I’m open to suggestions. And if there’s people that you think are like, oh, my God, like, this is extraordinary. The 2 of you are going to have the most amazing conversation.

I’m definitely looking forward to it. And by the way, I’m also open to ideas for topics I should be covering here. The way I approached Playing with Unicorns was what are all the things I wish I knew when I was starting as a founder in 23 and back in 1998 that I now know and that’s why it’s really been structured.

How do I come up with ideas? How do I evaluate or validate the company? The idea is how do I raise capital? How do I write a deck? what are the trends et cetera? It’s really been a, if I was to teach a business school class, what would be the content in that business school class?

[01:42:41] Abdalla: Concerning virtual assistance, I’ve launched a startup similar to a startup you invested in 7-10 years ago. Do you think we can convince you to invest in an idea that you already invested in and failed?

So actually, we have invested in the same concepts multiple times that have failed because maybe there’s a reason for why now. And so, as I said earlier in this conversation, you know, many of the companies in the late 90s, like Webvan and eToys and Chewy, actually made sense.

It just didn’t make sense then. But not Chewy, Pets.com. They make sense now with Instacart Chewy. It just didn’t make sense back then because the infrastructure needed to make it work didn’t happen, right? There was a company called Cosmo that was trying to do like, local delivery, but without a smartphone or the GPS, it didn’t make, it didn’t work.

But now, of course, DoorDash, Uber Eats, Postmates, whatever. Now it really works, but back then it didn’t make sense. So, yes, happy to revisit. The burden of proof is reasonably high, but as long as you can show you have economic traction, why not?

[01:43:47] Have you ever had a founder pitch you for a stake in their company and you end up buying it?

Like selling a stake? Have we done secondaries? Yes, but not in the early stage. We wouldn’t do a secondary and like pre seed and A, in the late stage where the company is worth one or hundreds of millions or a billion and the founder is taking a little off the table where you invest, yes.

But would I buy a stake in a company? Not really. I mean, again, we’re angel investors. And so, we’re writing 3, 4, 500k check. We’re not going to; I don’t want to own a meaningful chunk of a company unless I’m co-founder, executive chairman. And these, I have a tendency to build myself, right? So, Midas. We’re playing that. It’s a startup studio company. I’m the executive chairman. I’m very implicated by this company I came up with. It’s not one I would buy a stake in.

So, the answer is no. Not against it. It would have to be, you know, be rare. I would have to, like, love the person. They would want me as a part of some way, shape, or form. I wouldn’t have time to do it, et cetera. So unlikely, I’d say.

[01:44:58] Can you share the acceptance percentage of FJ Labs for the pre-seed and seed rounds? What are the chances that you will be invited to poll with your team?

Yes. So, we get 300 deals a week. The 300 deals come from three different sources. One is other VCs, about 100. Two is founders we’ve backed. So, we talk to one VC a day, basically every day, per quarter. So, we talked a hundred pieces of quarter, let’s say, and we share deals with them. That’s the highest conversion rate, taking the call and, and also the investment.

Number two, we backed, 1100 companies today. That’s about 2000 founders. They send us their friends. They send us, they come back to the next company. They send us their employees. It’s about a hundred deals a week and then cold inbound either to my email or mostly my LinkedIn, but also surprisingly to my Instagram, Facebook, whatever, another hundred. Lowest conversion rate, but we do look at it.

Of these 300, we take about 40-50 calls a week. So, it’s like 15% probability that if you send us a deck or pitch, we’ll take a call. And then we review these in the investment committee call on Tuesdays, 10 to noon EST. And then we’ll take a second call with 5 of them, 10 of them every week.

Often, I will be taking that call. And every week we’re investing in 3-4 companies. So, I’d say the, from the 300-submission level to a probability of investment is about 1%. And probability of a first call is like 15%. Now, from a first call, we’re down to 40. If we took a call with you about 7-9 percent of probability that we invest. So, it’s reasonably good if you pass the threshold for a call.

And I think that’s kind of it for right now. I think we’ve covered pretty much, pretty wide-ranging set of questions and very active and, a lot of viewers. So, I’m very excited that this show happened. Suggested perhaps I should do this live slightly more often, not just once a year on the Ask Me Anything type.

Taking my time here because there’s a slight delay between me speaking and you guys asking questions. So, let me know if there’s any more questions to cover. And if not, we’re going to wrap. Keep sending me ideas for topics to cover, guests to have, etc. And we’ll take them there.

Okay, I think that’s basically it. So, this is super fun. This is a fun, fast paced, engaging, conversation. And, you know, actually no.

One last question I see from Adam. I think this is the last question.

[01:47:53] What is the last job to be replaced by AI robots?

So, I don’t worry that jobs will be replaced by AI robots. I mean, a lot of jobs will be replaced by AI robots, but unemployment is not going to go up.

We used to be all farmers. And then we became factory workers, and now we’re in services. And all these jobs have been destroyed, but technology usually creates more jobs than it destroys. So let me give you an example. Let’s go back 25 years in the past. So, let’s go to 1999. Imagine in 1999, I told you in 2024, the top four job categories of 1999 will no longer exist.

There will be no more travel agents. There will be no more bank tellers. All of car manufacturing will have been automated. And retail will have been decimated with all of retail going online. Please describe the unemployment and the economic environment in, 2024. And people would be like, Oh, my God, great recession, 25 percent unemployment, Great Depression, the end of the world.

And yet, we have lower unemployment now than we had then, because it’s easy to imagine the jobs destroyed, it’s hard to imagine the new jobs being created from whatever, social media manager, and Twitch caster, and TikTok celebrity, and so, will there be a lot of jobs destroyed by AI and robots?

Absolutely. But there’ll be many more jobs created. They’ll be different than the ones we’re being done. And often it’ll be good that these jobs are destroyed, right? Like a lot of the jobs being destroyed are jobs that humans shouldn’t be doing. We should not be doing this a million times. You know, we’re not meant to be doing repetitive work tasks.

We’re not meant to be carrying boxes. We’re meant to be using our empathy and our intelligence and our emotions, right? Doctors right now, or cold, not really good diagnostic machines. That’s not what humans are good at. AI will do the diagnostics. The doctors will be the empathy compliance mechanism. So, I’m very excited for all the jobs that are going to be destroyed because we will have better jobs and they’ll be amazing.

And as productivity increases, salaries increase, and our quality of life will keep increasing. So, I am an optimist. There’s no worry. I would not worry about the job losses from the tech revolution. They’ve never been an issue and I suspect they will never be an issue. But thank you. This was super fun.

Look forward to the next one. And, yeah, take care!